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TMI Blog2024 (6) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and Cement Clinker and it availed CENVAT credit on inputs, capital goods and input services in accordance with the provisions of the 2004 Credit Rules. 3. Besides ex-factory sales, the appellant also sells the final product to their customer on Free on Road [FOR] destination basis, and consequently remains responsible for getting the goods delivered at the premises of the buyers. According to the appellant, it bears the risk of loss while the goods are in transit and the property in the goods passes from the seller to the buyer and the sale takes place at the customers place. The appellant availed the services of goods transport agency [GTA] for such outward transportation of its final products from the factory/ depots to the premises of the buyer and availed credit of service tax paid on such services. 4. Pursuant to the judgment of the Supreme Court in Commissioner of Central Excise and S.T. vs. Ultra Tech Cement Ltd [2018 (9) G.S.T.L. 337 (S.C.)], the department, by letter dated 08.02.2018, directed the appellant to reverse CENVAT credit availed on GTA services for outward transportation of goods for the period from April 2013 to June 2017. However, the appellant, with sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tan Zinc Ltd. The Division Bench held that Hindustan Zinc would be entitled to avail CENVAT credit of service tax paid on the service of GTA services availed for outward transportation of goods on FOR destination basis from the factory gate/depot to the premises of the customers under rule 2(l) of the 2004 Credit Rules. 12. The Commissioner has disallowed credit to the appellant basis the judgment of the Supreme Court in Ultratech Cement. 13. This judgment of the Supreme Court in Ultratech Cement, therefore, needs to be considered first. The Supreme Court examined the admissibility or otherwise of the CENVAT credit availed on service tax paid for GTA service for transport of goods from the 'place of removal' to buyer's premises. In this connection, the Supreme Court referred to the definition of 'input service' in rule 2(l) of the 2004 Rules as it stood prior to its amendment on 01.03.2008 and noted that in view of the use of the expression 'from the place of removal', the service used by the manufacturer from the place of removal to the warehouse or customer's place would be exigible for CENVAT credit, but in view of the amendment made in the definition of 'input service' from 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Commissioner (Appeals) has been approved by the CESTAT as well as by the High Court. This was the main argument advanced by the learned counsel for the respondent supporting the judgment of the High Court. ***** 10. In the first instance, it needs to be kept in mind that Board's Circular dated August 23, 2007 was issued in clarification of the definition of 'input service' as existed on that date i.e. it related to unamended definition. 11. As can be seen from the reading of the aforesaid portion of the circular, the issue was examined after keeping in mind judgments of CESTAT in Gujarat Ambuja Cement Ltd. and M/s. Ultratech Cement Ltd. Those judgments, obviously, dealt with unamended Rule 2(l) of Rules, 2004. The three conditions which were mentioned explaining the 'place of removal' as defined under Section 4 of the Act, there is no quarrel upto this stage. However, the important aspect of the matter is that Cenvat Credit is permissible in respect of 'input service' and the Circular relates to the unamended regime. Therefore, it cannot be applied after amendment in the definition of 'input service' which brought about a total change. Now, the definition of 'place of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CX., dated 8-6-2018 F. No. 116/23/2018-CX-3 Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes & Customs, New Delhi Subject : 'Place of Removal' under Section 4 of the Central Excise Act, 1944, the CENVAT Credit Rules, 2004 and the CENVAT Credit Rules, 2017 - Regarding. Attention is invited to Boards circular no. 97/8/2007-CX dated 23.08.2007, 988/12/2014-CX dated 20.10.2014 and 999/6/2015-CX dated 28.02.2015. Attention is also invited to the judgment of Hon'ble Supreme Court in the case of CCE vs M/s Roofit Industries Ltd. 2015 (319) ELT 221 (SC) = 2015-TIOL-87-SC-CX, CCE vs Ispat Industries Ltd 2015 (324) ELT 670 (SC) = 2015-TIOL-238-SC-CX, CCE, Mumbai-III vs Emco Ltd 2015 (322) ELT 394 (SC) = 2015-TIOL-163-SC-CX and CCE & ST vs. Ultra Tech Cement Ltd dated 1.2.2018 in Civil Appeal No. 11261 of 2016 = 2018-TIOL-42-SC-CX. In this regard, reference have been received from field formations seeking clarification on implementation of aforesaid circulars of the Board in view of judgments of Hon'ble Supreme Court. 2. In order to bring clarity on the issue it has been decided that Circular no. 988/12/2014-CX dated 20.10.2014 sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Roofit Industries Ltd. 2015 (319) E.L.T. 221 (S.C.). To summarise, in the case of FOR destination sale such as M/s. Emco Ltd. and M/s. Roofit Industries where the ownership, risk in transit, remained with the seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal, benefit has been extended by the Apex Court on the basis of facts of the cases. (ii) Clearance for export of goods by a manufacturer shall continue to be dealt in terms of Circular No. 999/6/2015-CX., dated 28-2-2015 as the judgments cited above did not deal with issue of export of goods. In these cases otherwise also the buyer is located outside India. 5. CENVAT Credit on GTA Services etc.: The other issue decided by Hon'ble Supreme Court in relation to place of removal is in case of CCE & ST v. Ultra Tech Cement Ltd., dated 1-2-2018 in Civil Appeal No. 11261 of 2016 on the issue of CENVAT Credit on Goods Transport Agency Service availed for transport of goods from the 'place of removal' to the buyer's premises. The Apex Court has allowed the appeal filed by the Revenue and held that CENVAT Credit on Goods Transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reakage on the assessee account which would clearly imply that till the goods reach the destination, ownership in the goods remain with the supplier namely the assessee. As per the 'terms of payment' clause contained in the procurement order, 100% payment for the supplies was to be made by the purchaser after the receipt and verification of material. Thus, there was no money given earlier by the buyer to the assessee and the consideration was to pass on only after the receipt of the goods which was at the premises of the buyer. From the aforesaid, it would be manifest that the sale of goods did not take place at the factory gate of the assessee but at the place of the buyer on the delivery of the goods in question. 14. The clear intent of the aforesaid purchase order was to transfer the property in goods to the buyer at the premises of the buyer when the goods are delivered and by virtue of Section 19 of Sale of Goods Act, the property in goods was transferred at that time only. Section 19 reads as under: "19. Property passed when intended to pass. - (1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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